ELLIOTT WAVE ANALYSIS - Latest Market Commentary
13th February 2016 - In recent updates, Elliott Wave counts have indicated that recent stock market declines are approaching important lows that signals the completion of an overall counter-trend phase that began from last year’s highs. A three ###wave pattern is evident in the S&P 500’s sell-off from last May’s high of 2134.72 with downside targets either already achieved at 1810.10 or destined to stretch slightly lower towards 1773.85+/- before beginning a new multi-month uptrend. The S&P is not alone – the Russell 2000 and Nasdaq 100 have both unfolded during the same period as counter-trend expanding flat patterns. Both are either forming lows now or approaching slightly lower levels. In Europe, the Eurostoxx 50 is completing a five wave pattern from the secondary highs traded last November and potentially a larger three wave pattern from last April. This is also duplicated for Germany’s Xetra Dax. Not included in this report but important nonetheless is the fact that the Dow Jones Transportation Average has already completed a counter-trend zig zag pattern from the 2014 highs into the late-January lows with the Biotechnology index… read full summary in our latest report!
13th February 2016 - The US$ index has been in decline since early-December even whilst stock markets have seen double-digit percentage losses during the same period. With so much anxiety in the financial system, safe-haven buying for the US$ dollar seems to have been completely ignored as fears grow that negative interest### rates will also knock on the door of the Federal Reserve at some stage in the not-too-distant future. But on a more optimistic note, the US$ index traded down to exact Fibonacci support levels last week at 95.23. The following price-rejection isolates a counter-trend zig zag decline from the Dec.’15 high that signals an end to declines and the beginning of a sustained recovery. The inverse of this can also be seen in the Euro/US$. The December upswing from 1.0524 defines a counter-trend zig zag completing last week to fib-price-ratio targets at 1.1377 opening the way for declines to begin. Sterling/US$ dislocated… read full summary in our latest report!
Bonds (Interest Rates)
13th February 2016 - The overriding themes so far this year are weakening earnings from major corporations, sterile economic growth in developing countries, particularly Europe, China’s GDP below 7% per cent, fears over continuing declines in commodities that affect emerging markets and more recently, declining earnings from ###investment banks and low liquidity coverage ratios (LCR’s). Furthermore, the negative interest rate policies of central banks in Europe, Switzerland, Japan and others has caught the attention of Janet Yellen at the Federal Reserve. In last week’s address to the House Financial Services Committee, she commented that she didn’t want to eliminate the idea of using negative interest rates as a policy tool in order to support the economy if required. That comment spiked long-dated yields lower in an already trending decline from last December. The US10yr yield traded down to 1.528 but its subsequent snap higher to 1.670 isolates a corrective pattern from the June ’15 high. read full summary in our latest report!
13th February 2016 - Last Thursday’s upward acceleration for precious metals was the largest single-day advance since prices began trending higher from the Dec.’15 lows – gold ran up from $1197.00 to $1263.25, a gain of +$66.25 dollars### whilst silver began from $15.28 trading to a peak at $15.97, +$0.69 dollars. This coincided with further anxiety within financial markets as stock markets climbed a wall of worry over concerns of deflation and the inability of central banks to stimulate global economies. Precious metals have been one of the main beneficiaries of stock market declines as investors have sought to buy safe-haven assets. Sharp price rises for gold and silver are perfectly timed because overall counter-trend declines from the 2011 peaks were already indicating directional trend change. But there are signs that the stock market may be completing overall counter-trend declines from last year’s highs. Does that mean precious metals will now resume downtrends? We believe…. read full summary in our latest report!